Advertisers decode social networks for profit

Winning over a minority of users of MySpace, Facebook and similar websites could hold the key to turning the social networking internet phenomenon into a viable medium for advertisers.

Only 8 per cent of internet users regularly upload the video clips, blogs and other content which draws millions to social websites, according to Agency.com, the international digital agency.

But this group forms an elite - with a wider range of internet contacts and more influence in shaping opinions of their peers.

Agency.com argues that only identifying and working with this minority will unlock the marketing potential of fast-growing social networking websites.

Microsoft, the US software group trying to expand its web advertising businesses, reached a similar conclusion in a pan-european study of online social media earlier this year.

The advertising challenge posed by such websites will be one of the central themes debated at the Cannes Lions, the global advertising industry’s premier awards event, this week.

Advertising is the main revenue stream of MySpace, YouTube and others, but advertisers have struggled to make conventional campaigns effective on such websites.

Although the websites draw millions of users, audiences are typically spread very thinly over a huge number of different areas and often averse to overt marketing approaches.

Arguably, the sites have been as notable for their ability to spread bad publicity - as when social networkers shared complaints about the battery life of Apple’s iPod or delays over Sony’s PlayStation3 games console - than for marketing successes.

James Clifton, european planning director at Agency.com, said: “The rise of social media has almost caught marketers out. There are millions of people on MySpace, so brands think they must advertise there.

“They’re missing the point. People are on MySpace or Facebook to have conversations with other people, not to be talked at by advertisers.”

Working with BrandGenetics and Hall & Partners, the research companies, Agency.com studied only UK users of such websites, but believes the pattern applies to other markets.

Mr Clifton said: “We think that by getting closer to the uploaders, we can start to undertand their DNA and work out ways to turn them into active promoters of brands to other internet users.

“At the moment they are not massively engaged by advertising, but they do like brands, they are opinionated and they have a greater propensity to talk about brands than average consumers.”

He said that companies may find social networks as valuable for providing market research opportunities - by asking uploaders to test or review new concepts or prototypes - as for delivering advertising.

During P&G’s UK launch of the Gilette “Fusion” razor, targetted people blogging on male grooming to encourage them to spread positive news about the product.

Ms Donnelly said: “Online you have to have a very different marketing model. We’re using it to build relationships with our consumers.

“You cannot necessarily reach the same number of people with one message as TV. It will never have the same audience reach as a commercial television spot, but it does give us the potential to personalise our message and engage with consumers at a much deeper level than we could via television.”